With the launch of a much-hyped and against-the-odds
electric car, Lei Jun, Xiaomi's co-founder and CEO, is taking on Elon Musk with
a strategy that takes a page from Tesla's playbook.
Lei, 54, took the stage in Beijing on Thursday to unveil
Xiaomi's SU7 car, a project three years in the making that has attracted a lot
of attention but which, Lei has warned investors, will lose money.
During Thursday's two-hour event - a livestream millions of
Chinese tuned in to watch - Lei made a jibe at Apple for dropping its car
project and declared Xiaomi's EV superior to Tesla's Model 3.
Fans dubbed the Xiaomi CEO "Thor" on social media,
a play on his surname which means thunder in Chinese. Some commented that his
outfit - a grey blazer over a black t-shirt - looked like something Musk would
wear.
Already a household name in China, Lei's marketing strategy
for his EV borrows directly from Musk, said Yale Zhang, managing director at
Automotive Foresight.
"One person equals an entire marketing team,"
Zhang said. "With every word he says, the attention he attracts online is
of a different magnitude."
Born in central China, Lei graduated from Wuhan University
with a degree in computer science before working his way up to become chief
executive of software firm Kingsoft.
In 2010, he co-founded Xiaomi. By 2014, the tech startup had
a valuation of $46 billion.
The Beiijng-based company has grown with the popularity of
its smartphones and home appliances, beloved in Chinese households for their
affordability and sleek styling.
Last year, Xiaomi launched more expensive smartphones to
compete with Apple's iPhone, but Lei's decision to sell a sporty EV that draws
styling cues from Porsche will test the Chinese company's ability to shift to a
new, premium market.
In 2021, Lei announced Xiaomi would build its own EV, an
undertaking he said then would be "the last major entrepreneurship
project" of his life.
"In the three years of developing this car, my biggest
realization is that making cars is extremely difficult,” Lei said on Thursday.
"Even a giant like Apple gave up on it."
BEIJING BACKING
The SU7 - short for Speed Ultra 7 - enters a crowded China
EV market with an attention-grabbing price tag, under $30,000 for the base
model, cheaper than Tesla's Model 3 in China.
Xiaomi built a Beijing factory capable of producing 200,000
cars annually before it had regulatory approval to start manufacturing in
China. State-owned automaker BAIC Group disclosed in November it would make the
cars for Xiaomi - at the same Xiaomi plant.
Xiaomi, which plans to sell the SU7 only in China for now,
did not immediately respond to a request for comment.
Lei said without the support of the Beijing authorities, it
would have been "impossible" to complete the car in three years,
according to a transcript posted by auto blogger Chang Yan, who was among a
group of Chinese reporters invited to interview Lei on Thursday.
Musk also won support from the Shanghai government when
setting up the Tesla factory there. The construction of Tesla's Shanghai plant
took less than a year after it broke ground in 2019.
Analysts remain split on whether Lei's project will go
beyond creating buzz to make money in a hyper-competitive EV market. "The
risk is that they focus too much on the EV space and lose focus on the sectors
and products that got them there,” said Tu Le, founder of consultancy Sino Auto
Insights.
Lei said he had originally planned to sell the high-end
version of the SU7 for around $48,500 before cutting that to about $41,500 as
other automakers slashed prices.
"Xiaomi has enough cash reserves to cope with any
fierce competition in the next five years. And if it is possible, Xiaomi will
look for ways to accumulate more cash," Lei said.
Xiaomi said it had received 50,000 orders in the first 27
minutes of the SU7 going on sale. On Friday, it said that figure hit 88,898 in
24 hours.
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